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Territorial Application; Jurisdiction of Courts; and Form of Procedure

Section 102

(50 U.S.C. App. § 512)

(1) The provisions of this Act shall apply to the United States, the several States and Territories, the District of Columbia, and all territory subject to the jurisdiction of the United States, and to proceedings commenced in any court therein, and shall be enforced through the usual forms of procedure obtaining in such courts or under such regulations as may be by them prescribed.

(2) When under this Act any application is required to be made to a court in which no proceeding has already been commenced with respect to the matter, such application may be made to any court.

General application. It is not clear whether Congress intended, by the language of the first clause of section 102(1), to make the Act specifically applicable to the governments of the geographical areas mentioned or merely to delineate those areas within which the Act would have operative force. The question is now, however, of small importance. The provisions of the Act were held applicable to the governments and the territories of the geographical areas listed in the statute.

The Attorney General of the United States early advised the Secretary of Agriculture in unequivocal terms that the Soldiers' and Sailors' Civil Relief Act of 1940 is applicable to all agencies of the Federal government. In so doing, the Attorney General recognized, but did not decide between, the two possible interpretations of the statutory language. Instead, he invoked the rule of construction that a sovereign is bound by a statute when the sovereign is a chief party of interest in the statute. The Attorney General recognized this rule as an exception to the general rule of statutory construction that the sovereign is not bound by its own statutes.

The courts have applied the provisions of the Act to the United States without exception, as well as to state and municipal governments.

Additionally, State courts have applied the Act in its entirety, regardless of whether a particular provision under which relief is sought has no counterpart in state law

Judicial proceedings. The second clause of section 102(1) makes the Act applicable to proceedings commenced in any court within a geographical area over which the United States has jurisdiction. Section 101(4) defines the term "court" as any competent Federal or State court, whether or not it is a court of record. The third clause of section 102(1) allows courts to handle proceedings involving the Act either by use of "the usual forms of procedure" or "under such regulations as may be by them prescribed." For purposes of Federal jurisdiction, however, the Act does not generally present a Federal question. In Davidson v. General Finance Corporation, the court held that an action against a finance company for alleged fraudulent conversion of an automobile sold at a sheriff's sale, following the company's foreclosure of a conditional sales contract, was a common-law action only incidentally involving the Act. In Garramone v. Romo, et. al, a plaintiff asserted his rights under the SSCRA as part of a civil rights action under 42 U.S.C. Section 1983. The SSCRA, while not a jurisdictional statute, may be effectively combined with other causes of action as an equitable argument. In the recent case of Moll v. Ford Consumer Finance Co., Inc., a federal court has ruled that service members may have a private cause of action against creditors that refuse to voluntarily apply the six percent interest cap [50 U.S.C. appx. § 526] when requested, “because otherwise the relief would [be] of no value at all.”

With the exception of section 205, the Act makes no reference to administrative proceedings. In those few cases where this issue has been raised, it appears that administrative proceedings are not covered by the Act. For example, in Polis v. Creedon the court held that a proceeding before an area rent director was not a proceeding before a court and that a landlord in the military service had no protection under the Act. Unquestionably, however, section 205 of the Act, which suspends the running of the statute of limitations while a member is in the military service, is applicable in administrative proceedings.

The SSCRA does not empower district courts to collaterally review, vacate or impede decisions of state courts.

Persons Liable on Service Member's Obligation

Section 103

(50 U.S.C. App. § 513)

(1) Whenever pursuant to any of the provisions of this Act the enforcement of any obligation or liability, the prosecution of any suit or proceeding, the entry or enforcement of any order, writ, judgment, or decree, or the performance of any other act, may be stayed, postponed, or suspended, such stay, postponement, or suspension may, in the discretion of the court, likewise be granted to sureties, guarantors, endorsers, accommodation makers, and others, whether primarily or secondarily subject to the obligation or liability, the performance or enforcement of which is stayed, postponed or suspended.

(2) When a judgment or decree is vacated or set aside in whole or in part, as provided in this Act, the same may, in the discretion of the court, likewise be set aside and vacated as to any surety, guarantor, endorser, accommodation maker, or other person whether primarily or secondarily liable upon the contract or liability for the enforcement of which the judgment or decree was entered.

(3) Whenever, by reason of the military service of a principal upon a criminal bail bond the sureties upon such bond are prevented from enforcing the attendance of their principal and performing their obligation the court shall not enforce the provisions of such bond during the military service of the principal thereon and may in accordance with principles of equity and justice either during or after such service discharge such sureties and exonerate the bail.

(4) Nothing contained in this Act shall prevent a waiver in writing of the benefits afforded by subsections (1) and (2) of this section by any surety, guarantor, endorser, accommodation maker, or other person whether primarily or secondarily liable upon the obligation or liability, except that no such waiver shall be valid unless it is executed as an instrument separate from the obligation or liability in respect of which it applies, and no such waiver shall be valid after the beginning of the period of military service if executed by an individual who subsequent to the execution of such waiver becomes a person in military service, or if executed by a dependent of such individual, unless executed by such individual or dependent during the period specified in section 106.

Primarily and secondarily. Sections 103(1) and 103(2) provide those persons who are either primarily or secondarily liable with a service member on an obligation or liability with the same rights to delay actions and vacate judgments available to service members. Specifically, these sections allow the court in its discretion to grant stays, postponements, or suspensions of suits or proceedings to sureties, guarantors, endorsers, accommodation makers, and others.

In considering whether to grant the stay to a co-obligor, the courts have applied a number of tests. In Modern Industrial Bank v. Zaentz the court specified that co-obligors are entitled to a stay only if the service member is a party to the action and the action has been stayed as to the service member. In Tri-State Bonding Co. v. State the court held that a surety could not obtain a stay unless he could show that the principal was in the military service on the date the principal was scheduled to appear, that an unsuccessful effort to secure the principal's appearance had been made, and that the principal's military service prevented his attendance on that date. Finally, a Georgia court held that where liability is joint and several and the action is brought against an accessible civilian party, the proceedings will not be stayed unless the service member is a party to the action

In exercising their discretion "the courts are primarily influenced by two considerations: first, whether the man in service is able to appear and defend, and second, whether a default on an obligation by reason of the change in his income will lead to an unjust forfeiture." The right to open a judgment taken against a person in the military service is reserved to that person only and is not available to a judgment co-debtor.

Courts differ concerning the propriety of granting stays when the defendant service member is protected by insurance and might be considered as only nominally a party to the suit. In Boone v. Lightner, the Supreme Court recognized this problem when it stated that: “a nominal defendant's absence in the military service . . . might be urged by the insurance company, the real defendant, as a grounds for deferring the trial until after the war”. In those cases where the issue has been litigated, the courts have taken several approaches: (1) granting the stay, (2) granting the stay on condition that the insurer post a bond, or (3) simply denying the stay on the grounds that an insurance company should not be permitted to use the protection of the Act as a shield to postpone or escape liability. In one instance, the court agreed that it could grant stays of proceedings to sureties, guarantors, and other persons primarily or secondarily liable when proceedings have been stayed as to one in the military service. The court determined, however, that a stay is not warranted in the cases of primary or secondary obligors unless it is apparent that denial of the stay would leave the civil rights of the person in the military service unprotected. More recently, an appellate court reversed a trial court that refused a stay to a service member when the limit of his insurance coverage was less than the amount demanded by the plaintiff. Another court concluded, however, that it was an abuse of discretion to deny a request for continuance even though the plaintiff would enforce any judgment recovered only against the proceeds of the insurance policy. The modern trend is for courts to look to the “real defendant”, and deny SSCRA stay coverage to military member defendants where the plaintiff has agreed to limit tort recovery to defendant insurance policy coverage limits. A well-reasoned opinion in this area is Tabor v. Miller. In that case, although a motion for continuance was ostensibly made on behalf of the military member, the court held that the real party in interest was the service member's insurance carrier. In reaching this decision the court noted that although the plaintiff's claim exceeded the service member's policy limits, his insurance carrier had rejected a settlement offer within those limits. The court concluded that the service member's absence had not materially affected the conduct of his defense, and upheld the lower court's decision to deny the requested continuance.

Co-defendants. As previously indicated, a proceeding stayed as to a service member may also be stayed as to others primarily or secondarily subject to the same liability. In section 204, however, the Act allows a court to proceed against other co-defendants, notwithstanding a stay as to the service member.

A Washington state appellate court was presented with the problem of a service member driving a vehicle owned by his father. They were named as co-defendants in a negligence action. The incident giving rise to the suit was witnessed only by the plaintiff and the absent service member-son. The trial court stayed the proceedings as to the son but denied a stay to the father, who was independently liable under the doctrine of imputed negligence. The appellate court held that the denial was within the trial court's discretion.

Criminal bail bond sureties. The language of section 103(3) prescribes that the court "shall not enforce the provisions of a criminal bail bond during the military service of the principal" and “may in accordance with the principles of equity and justice either during or after such service discharge such sureties and exonerate the bail." In United States v. Jeffries the court held that because there was no doubt that the principal was in the military, it was without authority to forfeit the bail bond and issue a warrant of arrest. Subsection 103(3) was mandatory in that case. A New York court took this one step further and held the bond could not be forfeited if the principal was in the service even if he were on furlough at the time he was required to appear. In Ex Parte Moore, however, an Alabama court concluded that military service alone was insufficient to prevent forfeiture of the bail bond without a further showing that military service prevented the principal from attending the trial. In this regard, state courts will ordinarily require the surety not only to show that the principal is in the military, but also to demonstrate an effort to secure the principal's attendance. In cases in which the principal was discharged four months before default or was not inducted until almost six months after he was required to appear, the surety could not avoid forfeiting the bail bond under subsection (3) of this section.

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Above Information Courtesy of United States Army JAG Corps